U.S. Military Contractors Ring Up $11 million in Charges
at the Kuwait Hilton; Congressional Probe Continues

By David Ivanovich, Houston ChronicleKnight Ridder/Tribune Business News

June
30, 2004 - WASHINGTON -- Auditors looking into hefty charges rung up by
Halliburton Co. and others at a beachfront hotel in Kuwait chastised
the Coalition Provisional Authority for failing to better control
costs. The authority's inspector general, examining $11 million in
charges being incurred annually at the five-star Kuwait Hilton, said
the Provisional Authority "did not apply adequate oversight to ensure
that operating costs were minimized."

According to an inspector
general's audit report made available Tuesday, the auditors proposed
cost-saving measures they calculate would save about $3.6 million a
year.

The hotel was supposed to be used by "executive personnel" being deployed to the region.

Lower-ranking employees were supposed to stay at less expensive villas.

But the authority failed to "provide clear guidance" as to who was eligible to stay at the hotel, the report said.

And as a result, Halliburton subsidiary KBR allowed lower-level workers to stay there as well.

That pushed up costs by some $2.85 million a year, the report said.

The
government could have saved $191,000 for laundry service alone if it
had installed washers and dryers in the villas for workers to use,
rather than allow them to use the hotel laundry service.

Halliburton
spokeswoman Cathy Gist said the company assigned living accommodations
for its workers "as approved by the military."

The military, Gist added, also approved the use of the hotel laundry service.

Rep.
Henry Waxman of California, the ranking Democraton the House Government
Reform Committee who has pushed for a congressional probe into the
government contracts, called the report "another instance of
Halliburton overcharging."

"Three independent auditors have now looked into Halliburton's billing practices...

"They
have all reached the same conclusion: The administration has given
Halliburton a blank check to overcharge the taxpayer," Waxman said.

Gist called that characterization "an affront to all of our many employees who are currently working in the Middle East."

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